Issue May 27, 2014

Trust deficit

Mayor Fischer’s budget leaves behind funding for Affordable Housing Trust Fund

Mayor Greg Fischer presented his 2014-15 budget to Metro Council last week, the major component of which is a 3 percent franchise fee on LG&E customers’ gas bills, adding nearly $5 million to the budget. Nearly the identical amount of money will go toward public safety improvements — in the wake of a night of violence by teens in Waterfront Park and downtown in March — including more police officers downtown and a “real time crime center” where cameras will be monitored 24/7.

Notably absent from Fischer’s budget was any new appropriation for the Louisville Affordable Housing Trust Fund, which provides financial assistance to organizations dedicated to addressing the affordable housing needs of low-income individuals and families in Louisville. Created in 2008 by Metro Council with the promise of being funded with $10 million each year, LAHTF has yet to receive even half of that amount in total during its years of existence.

In a press briefing before he made his budget public, Fischer explained to LEO that no additional funding was being directed toward LAHTF because “there is money in their existing fund that has not been spent yet.”

However, Rachel Hurst, executive director of LAHTF, says that while last year’s budget directed $1 million in HOME funds to her organization that are overseen by Metro Community Services and Revitalization, the city has yet to give LAHTF access to use this money.

“There is money that was allocated, but we have absolutely no access to it through no fault of our own,” says Hurst.

Allocated last summer, CSR only submitted their “pre-draft” agreement to LAHTF two weeks ago for the release of the money, which must now be reviewed by the Jefferson County Attorney’s office. LAHTF was told they would receive a final draft to sign in June, but the money might not be available to spend until the fall.

“We knew we couldn’t proceed with promising things to the community, we couldn’t enter into any legal agreement with someone and … be able to tell them when we could actually do that, whether it would be two months or 14 months,” says Hurst. “And that can cause affordable housing deals to fall through, if they’re relying on a stream of funding that can’t be produced. So we know we can’t offer it to the community until CSR presents us with a grant agreement.”

While Hurst is grateful that CSR appears to be making progress now, she says this delay has hurt LAHTF’s ability to combat Louisville’s growing affordable housing crisis.

“We wish we could have offered it earlier, because there is such a need right now, with 25,000 people still on the waiting list for public assistance, and one in eight JCPS students (12,000) who are homeless,” says Hurst. “A delay of a year or more has really impacted individual families and our ability to try to resolve this problem.”

Hurst adds that the lack of progress on funding LAHTF is especially frustrating, “considering that Lexington just allocated $3.5 million to their housing trust fund. They just started their trust fund a few years ago, while the LAHTF was established by an act of Council in 2008 and has never received anything like $3.5 million. So we know other cities are showing the will to do that and desire to really be serious about solving this housing crisis, and we hope Metro Council will understand, like they did last year, that this is something they need to honor their commitment to and come up with some additional money for the trust fund.”

An effort last year by several Council Democrats to create a dedicated $10 million funding stream for LAHTF by raising insurance premiums by 1 percent was nixed by the county attorney’s office, who said diverting the new revenue into a specific fund is unconstitutional. Two of the four Council Democrats who sponsored that legislation and have led the charge for a dedicated funding stream will not be in office next year, as Councilwoman Tina Ward Pugh, D-9, is retiring, and Councilwoman Attica Scott, D-1, was defeated in her primary race last week.

Hurst notes that a Council working group dedicated to how LAHTF should be funded will have its recommendations finalized in June, and hopes Fischer puts his political weight behind it. “I hope when that happens, Mayor Fischer will support the recommendations of the working group and use his energy and political will to make sure this could pass,” says Hurst. “I know there’s a number of causes he really champions, and I hope that this can become one of them.”

Fischer’s spokesperson did not reply to an email asking about the $1 million LAHTF has not received, but his chief financial officer, Steve Rowland, says the budget devotes $500,000 to constructing “market-rate housing,” as “it’s not only an affordable housing issue.” Fischer told LEO on Thursday that Metro Council members should build consensus among themselves if they want to find new revenue to dedicate toward LAHTF.

While Fischer’s budget allocated $2.2 million to youth programs and renovating community centers, others have noted that more than double that amount is going toward increasing police patrols and camera surveillance downtown — more “Big Brother” than Big Brothers and Big Sisters — stressing more emphasis on reacting to the night of violence in March than the systemic problems of youth development and lack of stable housing that may very well have been at its root.

“I support the LG&E franchise fee and hope we will remember that the need for affordable housing is just as great as the need for public safety,” said Councilwoman Scott in a statement after Fischer’s budget was released. “When more than 12,000 students in Jefferson County Public Schools are homeless, we must have the public will to be proactive on housing just as we are being reactive on public safety.”